Complete issue (pdf, 7520.08 MB, EN) - GIZ

those who benefit most from microloans provided by the mateete microfinance
cooperative trust Limited are small entrepreneurs like this tailor.
But around 70% of these mainly family-run
farms produce only as much as they need for
themselves. Thadeus Kiggundu Kafeero has always
aimed higher. In recent years he has continually
expanded his farming business –
mainly thanks to loans from the credit cooperative
in Mateete. He currently employs a dozen
farmhands.
good client relations pay dividends
He has never applied for a loan from a conventional
bank. ‘I couldn’t understand how to fill
the forms in properly and in any case all the
banks are in the city, in Masaka, and that is
much too far away from my farm,’ he explains.
For most members of the cooperative, the village
of Mateete has the advantage that it is relatively
easy to get to if necessary. But there are
also members who live in more remote areas
with poor transport connections. In such cases
the cooperative’s employees travel to meet their
customers by car or motorcycle. It is a service
that is clearly appreciated: in addition to the
farmers and traders, the cooperative now attracts
membership from entrepreneurs, schools
and religious communities.
According to Maria Gorreth Naluwo, who
works in credit control, the success of the Mateete
cooperative among local people can largely
be attributed to the ‘emotional factor’. ‘When
if the customer is unable to come to the cooperative, the cooperative can come
to him – an employee on the way to an appointment.
people come in to make loan repayments or pay
money into a savings account,’ she explains,
‘they often see it as an opportunity to strike up a
spontaneous conversation about other personal
matters.’ So it is not all about business. Indeed,
the credit cooperative positively encourages
building such customer relations as a way of dispelling
the widespread suspicion with which
savings and credit cooperatives are regarded in
general.
GIZ employee Christian Königsperger,
who heads a programme developing financial
systems on behalf of the German Federal Ministry
for Economic Cooperation and Development
(BMZ), estimates the number of rural
credit cooperatives in Uganda to be in the order
of 2,000. In his experience, however, only a
small percentage of these meet minimum financial
and banking standards: ‘Only around a
dozen are run really professionally and have the
potential to provide their members with sustainable
financial services.’ In most cases these
are the relatively large cooperatives with as many
as 15,000 members. According to Königsperger,
any problems that arise are usually with the
many small cooperatives established with a political
agenda. These are endowed with money
by politicians eager to secure the approval of potential
voters. Anyone receiving a loan therefore
feels morally obliged to give his vote to the person
or party that provided the money. Good be-
haviour is rewarded ‘by not paying too much attention
to repayments,’ explains Königsperger.
no binding legal framework
Fraud is an additional problem in institutions
that are under-resourced in terms of staff and
technology; in some cases managers simply make
off with the contributions of cooperative members
overnight. Both political manipulation and
fraud are therefore obstacles to a stable savings
and credit culture. ‘In addition to technical support,
the cooperatives also need an appropriate
and binding legal framework that is consistently
implemented,’ says Königsperger. The Financial
System Development programme is currently
working with the Bank of Uganda and other national
partners to establish a new framework.
Such direct collaboration with the country’s central
bank has the invaluable benefit that all experience
derived from grass-roots cooperatives can
be fed directly into the political dialogue with
state decision-makers.
As the legal requirements become stricter,
the bar will be raised for rural credit cooperatives.
The key here is to ensure improvements are made
in all areas of business operations. Only relatively
few cooperatives will be able to reinvent themselves
completely. But the successful among them
will have the potential to make a significant longterm
contribution to improving the lives of the
34 akzente 04/2011